Online ads not anathema to effectiveness, according to Arc study

Optimum split is 55% spent offline and 45% spent online.

Image credit: Myriam Jessier via Unsplash.
Image credit: Myriam Jessier via Unsplash.

Online advertising is not the enemy of marketing effectiveness, according to research revealed by the Advertising Research Community (ARC) project.

The study – revealed at EffWorks Global 2021 today (13 October) by economist and Magic Numbers founder Dr Grace Kite – found that effectiveness of marketing campaigns has increased over the past five years, with advertisers finally understanding how to use online channels.

The findings were produced from examining a 2021 database of 343 non-award-winning campaigns that used effectiveness modelling. These accounted for £5bn of ad spend and on average generated £3.80 revenue per £1 invested.

Kite says this increase in effectiveness is down to a more developed understanding of online marketing and channels, with returns on investment returning to where they were in 2005.

Between 2005 and 2016, there was a significant shift in the budget allocated to new online channels. Marketers were experimenting and exploring new options available to them, finding an equilibrium in 2016.

According to the research, the optimum split is 55% spent on offline advertising and 45% spent on online advertising.

Kite said: “The evidence shows that we are in a far stronger position than perhaps the wider industry might have imagined. Our Arc work shows that advertising works, that we understand the online channels better than we ever have, and that non-awarded campaigns can learn from – and perhaps rival - those that have taken home the most coveted effectiveness trophies.”

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